At the start of 2026, the oil market was preparing for a very different story. Analysts were talking about excess supply, rising global inventories, and the risk of lower prices. Producers outside OPEC+ were increasing output, OPEC+ members were gradually bringing more barrels back to the market, and demand was not growing fast enough to absorb the additional supply. Everything pointed toward a period of relatively cheap oil. Then the conflict involving the United States, Israel, and Iran changed the picture within weeks. The market was reminded of a simple fact: oil prices depend not only on how much oil is produced, but also on whether that oil can actually reach buyers.
The turning point came after traffic through the Strait of Hormuz dropped sharply. Under normal conditions, around 15 million barrels of crude oil and another 5 million barrels of petroleum products move through the route every day. That is roughly one-fifth of global liquid fuels consumption. As shipments started to decline, the market quickly stopped talking about oversupply and began focusing on shortages. By the end of March, Brent crude had climbed to $127 per barrel, while the monthly average reached $103 per barrel, the highest level in years. Physical barrels were also trading above futures prices, something that usually happens only when supply becomes genuinely scarce.
At first glance, expensive oil should be good news for all exporters. In reality, oil crises rarely distribute profits evenly. Higher prices help only if producers can still move their barrels to customers. That is why some of the biggest losers were also some of the largest oil producers in the Middle East. According to international estimates, Iraq and Kuwait suffered the biggest setbacks. Their oil revenues fell by roughly three-quarters compared with the previous year. Higher prices simply could not offset the collapse in export volumes. Even Saudi Arabia saw only a modest 4.3% increase in oil revenue, while revenue in the United Arab Emirates declined slightly. The crisis highlighted a basic truth: a $100 barrel is not worth much if it cannot leave the region.
The hardest hit countries were in Asia. For decades, many Asian economies built their energy security around stable supplies from the Persian Gulf. In 2025, about 44% of all oil exports moving through the Strait of Hormuz went to China and India. Japan and South Korea were even more dependent on the route. For them, the problem was not just higher prices. For the first time in years, physical availability of oil became a real concern. Japan responded by releasing around 80 million barrels from its strategic reserves. South Korea’s petrochemical industry came under growing pressure as supply disruptions spread through the market. In parts of Southeast Asia, shortages of crude oil led to tighter fuel supplies and higher prices at the pump.
Europe was in a relatively stronger position. The region depends far less on flows through the Strait of Hormuz. As a result, the risk of direct shortages remained limited. But today’s oil market is global. Once world prices move higher, the impact spreads quickly through fuel costs, transportation, electricity prices, and industrial production. Even countries far from the Middle East felt the effects of the price shock.
At the same time, some countries and producers were able to take advantage of the changing trade flows. Russian oil was among the main beneficiaries. As supplies from the Persian Gulf became less reliable, buyers looked for alternative sources. Temporary licenses that allowed India to continue purchasing Russian crude also played a role. As a result, Russian oil exports reached 4.61 million barrels per day in March, the highest level since 2023. Prices followed. The average price of Urals crude climbed to $77 per barrel, while some spot quotations moved above $100 per barrel, reaching levels not seen since 2013.
Producers outside OPEC also emerged as potential winners. According to forecasts from the EIA and OPEC, most future production growth is expected to come from Brazil, the United States, Canada, and Argentina. For these countries, higher oil prices create new opportunities for investment, production growth, and export expansion. The United States stands out in particular. On one hand, higher energy prices affect American consumers. On the other hand, the country remains one of the world’s largest oil producers and holds substantial strategic reserves, giving it more flexibility than most import-dependent economies.
Yet the biggest winners of the crisis were neither countries nor oil companies. They were the owners of oil inventories. Throughout 2025, global commercial oil stocks grew steadily as the market remained oversupplied. At the time, those inventories were seen as a sign of weak demand and excess production. A few months later, they became a strategic advantage. After the crisis began, global stocks started to fall rapidly. According to the International Energy Agency, inventories declined by roughly 85 million barrels in March alone. China, meanwhile, continued building reserves and used the market disruption to strengthen its long-term energy security.
The most important lesson from the 2026 oil shock is not about prices or production. It is about how dependent the global economy still is on a handful of critical transport routes. In January, the market was discussing oversupply and growing inventories. By the end of the first quarter, analysts were warning about one of the largest oil deficits in years. The world was reminded that producing oil is only one part of the business. Moving it is just as important. And in 2026, logistics became the factor that determined who profited from expensive oil and who paid the highest price for it.
Sultan Valikhanov, expert of the EconomyKZ.org portal
